There’s a school of thought that many U.S. companies are chasing their tails in the quest for the Holy Grail of consumer economics – maximizing the value of customer data, in order to get customers to spend more money.
Mainly, companies are depending on old, proprietary marketing and data tools, They’re running in circles, and getting nowhere fast
That’s where predictive analysis enters the picture – a technology tool that information technology director’s are increasingly turning to upgrade customer retention rates, and to maximize customer return on investment.
A New Path To Consumer Data
Sure, marketing departments have made some progress tapping into customer buying habits, historically by relying on customer relationship management software, which aids companies manage customer data and customer interaction, access business information, automate sales, marketing and customer support and also manage employee, vendor and partner relationship.
But even all that isn’t enough.
Using a form of predictive analytics called “Next Best Offer”, marketers can better determine consumer spending habits and create outreach campaigns that connect with those customers, and get them buying their products or services.
Consider Facebook, which maps consumer habits on a real-time basis, 24-7. Every time a Facebook member posts a comment, photo or event, or responds to a comment, photo or event, Facebook logs that data. In that manner, the social media giant is constantly building a user profile of each user that helps Facebook analysts determine in a millisecond what users want to see, and what they are interested in buying.
Or how about eBay, and its Hunch-driven recommendation service? The online retailer leverages Hunch’s “taste graph” software-based consumer searches and responses to advertising, to push recommendations toward items based on their individual shopping preferences.
Thus the case for Next Best Offer, i.e. the determination of which company outreach program has the best chance to resonate with consumers and maximize ROI to the company.
10 Times Better
NBO has its origins in Amazon.com’s early use of so-called recommendation software (or collaborative filtering, in engineering-speak) to spur shoppers toward a “next best offer” based on site page visits and, of course, actual purchases.
In a word or two, NBO allows companies to attract the best customers, offer them the optimal products or services they want, and personalize offers recommendations.
How effective is NBO? The software company SAS says that deployment of next best offer technology and processes “is essential for gaining sustainable competitive advantage and achieving response rates as much as 10 times greater than standard outbound promotions.”
Using next offer data analytics, company’s garner “highly granular customer differentiation, and this provides the basis for delivering a wide variety of customer propositions,” SAS states.
It’s not all about the retail world, either.
Next Best Offer (also known as Next Best Action to data analysts) is also making deep inroads to the business-to-business world.
SalesForce.com just rolled out a NBO software package that assembles prospect data points and automatically translates them into actionable insights, enabling marketing and sales teams to sell smarter.
Obviously, company executives see a big market for NBO in the B2B sector.
“The B2B sales cycle has changed dramatically in recent years, primarily because prospects now research options online and engage with companies only when they’re close to making a purchase,” SalesForce states in its product rollout release. “While the actions prospects take during the research process present numerous engagement opportunities, most marketers and sales reps don’t have the visibility or context required to understand how best to connect with the individual and advance them through the buying process.”
“For example, marketers know a prospect opened an email, but don’t how long they were engaged with it or what they did next. And by the time sales receives the intelligence, the moment of engagement has passed and it’s too late to act on it. What they need is a solution that assembles the individual data points and translates them into actionable insights.”
Those insights are exactly what sales and marketing professionals need to stay one step ahead of the customer, and that’s a trend that will only grow stronger.
“The buying process has changed and companies need solutions that align the marketer and salesperson for consistent interactions with prospects” notes Mike Fauscette, group vice president, Software Business Solutions, IDC. “Companies that empower salespeople to determine the next-best action while finding new ways to extend marketing into the sales process will be more successful at creating life-long customers.”
To get the best data insight results using NBO, the best results come using predictive analysis tools that:
- Figure out exactly what a consumer needs based on each customer interaction, and each recordable consumer behavior.
- Use that data to provide personalized recommendations and offers to consumers in real time.
- Store and monitor each customer offer and interaction, no matter which channel you’re using. Also, track and record every response made to any offers you’ve provided to customers, or potential customers.
You’ll want data integration across all channels, especially the Internet; your company’s customer service center; and point of sale interaction, and through mobile and social media.
Take that shopping list with you when you start kicking some tires on the Next Best Offer predictive data front. Done right, you’ll have a much better picture of what your customers want, and you’ll be much better prepared in selling them more products and services, based on predictive data analytics in the NBO realm.